In a February 11, 2026 interview, Governor Josh Shapiro said Pennsylvania is considering withdrawing from PJM Interconnection, the regional transmission organization that manages the electric grid across 13 states and the District of Columbia in the Mid-Atlantic and Northeast.
The comments come amid growing concerns about rising electricity demand, price volatility in capacity markets, and the rapid expansion of large-scale data centers.
Pennsylvania’s Unique Position
Pennsylvania is a major net exporter of electricity. Thanks to its diverse generation mix — including natural gas, nuclear, coal, renewables, and hydro — the state produces more electricity than it consumes. As a result, decisions made within PJM’s regional market structure directly affect both in-state consumers and out-of-state buyers.
Critics of the current system argue that Pennsylvania ratepayers are increasingly exposed to regional market dynamics that may not align with the state’s economic interests. Supporters of PJM counter that the regional grid enhances reliability, spreads risk, and allows for more efficient dispatch of generation resources.
Data Centers and “Bring Your Own Power”
At the same time, Pennsylvania lawmakers are drafting legislation that would require large data centers to “bring their own power.” The proposal is aimed at ensuring that new, energy-intensive facilities do not drive up costs for residential and small business customers.
Data centers — particularly those supporting artificial intelligence, cloud computing, and high-performance processing — can consume as much electricity as small cities. Without dedicated generation or direct procurement agreements, their demand can tighten supply margins and influence capacity market prices.
The proposed policy would require these facilities to secure or develop new generation capacity rather than relying solely on the existing grid supply. The goal is to protect residential consumers from cost shifts associated with large-scale industrial load growth.
Protecting Residential Ratepayers
Governor Shapiro has framed the potential PJM withdrawal and the data center legislation as part of a broader effort to keep electricity prices “fair and reasonable” for Pennsylvania households.
Electricity affordability has become a growing concern as capacity auction prices within PJM have risen sharply in recent years. Higher capacity prices eventually flow through to consumer bills.
A withdrawal from PJM would be a complex and unprecedented move, requiring regulatory approvals and careful coordination to maintain reliability. However, even raising the possibility signals a serious reassessment of how regional market structures affect state-level energy economics.
What Comes Next
Any decision to leave PJM would have far-reaching implications for grid reliability, wholesale market participation, interstate energy flows, and long-term infrastructure planning. Meanwhile, the “bring your own power” proposal reflects a broader national debate over who should bear the cost of powering the digital economy.
It’s unlikely that Shapero will be forced to pull out. More likely, PJM will back down and cooperate. Traditionally, when PJM needs capital to improve the grid, it raises rates — not primarily for the direct revenue, but to incentivize new generation to come online. Shapero stated that he is trying to change this model by imposing a two-year rate cap and requiring large new users to “bring their own power.”
As electricity demand accelerates and grid stresses increase, Pennsylvania’s policy choices may become a bellwether for other energy-exporting states navigating the balance between regional cooperation, economic growth, and consumer protection.
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